In tooth and claw

Yesterday at noon 91 Donalda went nuts. At least the bidders did, all 21 of them. And $600K was just the starting point. “I grew up in that neighbourhood,” Tim says of his east-end Toronto childhood. “They had an open house on the weekend and then took registered offers in at noon. The 2 story house which sits on a quiet street faces an open field park directed across the street. I was considering it but am not that stupid nor desperate so decided not to put an offer in. 21 offers…WTF??”

When the dust settled, a property worth $598,800 before lunch, had a valuation in the afternoon of $740,888. That’s a premium of $140,000, or 23%. For a non-descript 1970s suburban special that would look perfect with a Corvair up on blocks in the driveway.

Let’s go to Calgary now. Here’s Brian.

“I sent you an email two weeks ago about my condo in Calgary,” he reminds me. “So here’s an update – 3 weeks on the market, no showings. 13 other units listed in our building, no showings for any of them either. Sure is a dead market right now.”

Over in Abbotsford, real estate sales have just hit the lowest point since 2009, while listings pop. There are now 8,320 houses for sale in the Fraser Valley, and last month just 799 sales. Prices are falling and sellers are freaking. “This is good news for home hunters,” says real estate board boss Sukh Sidhu. “For buying power you can’t beat the combination of greater selection, the continuation of extremely low interest rates and stable prices.”

And in Vancouver, just months ago the epicentre of housing lust, veteran realtor Pam Allen told the local paper, “Since October, it was like someone turned off the tap. It became absolutely dead.”

It’s a pattern being replicated across the Pacific port city, in a dramatic turnaround from the bidding wars, show day stampedes, and above-market offers that long dominated North America’s costliest property market. What’s taking the sizzle out of Vancouver prices and putting the brakes on sales are expectations that rock-bottom Canadian mortgage rates will stay low, so there is no rush to buy. At the same time, Chinese investors, who have long helped to underpin the city’s red-hot market, are holding back because property market curbs back home means they have less cash available. — Vancouver Sun

This is the unique nature of real estate. It’s a local commodity, unlike stocks, bonds, REITs or exchange-traded funds, which cost the same today on Bay Street in Toronto or Howe Street in Halifax. When people are desperate to get it, prices erupt past reason. Months later when attitudes change, buyers melt, values crumble. This is why housing is so dangerous, red in tooth and claw.

Economists will tell you it’s all about supply and demand, which is certainly true. To a point. In all of the GTA, home to millions, there are 10,000 listings. In the Fraser Valley, where 257,000 live, you have 8,320 to choose from. In Vancouver, a third the size of the GTA, twice the number of properties on the market – over 19,000.

So demand in the GTA is pushing supply, and prices are swelling as a result. The ensuing bidding wars, multiple offers, panicked buyers, voracious realtors, greedy vendors and cheap mortgages have created a casino mentality. Is this the environment in which you want to spend eight years’ worth of salary?

But it won’t last. Never does. Across the rest of the country listings are more in danger of dying of old age than being trampled. As Van realtor Pam reminds us, markets can change like someone turning off a tap. It can happen in a month. Hell, in a week.

While the deleveraging of real estate is already widely across this confused land, what could bring it to the godless, paved sprawl clinging to Lake Ontario?

Well, a scarcity of houses gets people excited, but changes in mortgage rates are just as profound. This week, as you know, those cheapo home loan rates that had Global anchors wetting their studio chairs are kaput. Not only did BMO’s 2.99 Special get yanked, but so did the competing products the other banks trotted out. Five-year loans are back above 4%, and it looks like an erection in the bond market will be awesome enough to gain even the Amazons’ attention.

Last autumn when this blog was overrun by doomers in Depends, telling you to buy gold and take cover before America defaulted, stock markets fell and bond markets rose. Investors looking for safety flocked to fixed income, driving bond prices higher and yields lower. Since then lots has changed. Every week comes more evidence the US economy is mending. Corporate profits are up, unemployment is down, credit demand is rising and jobless claims falling.

Stock markets have gained about 8% in the past six weeks, with shorts about to get slaughtered as the S&P 500 passes a milepost. Once again, buying when everyone is selling – as this holy blog suggested – is the path to salvation.

Anyway, bond prices are still high even as stocks advance. This is an anomaly and won’t last long. A torrent of money seems likely to gush out of bonds and into equities, bringing fixed income down and jacking rates. The good news is that those great preferred shares are about to get cheaper. The bad news is mortgages.

Finally, there’s that elfin bruiser, F. None too happy with BMO’s mortgage quickie at a time he wants real estate to chill, the buzz is he’s ready to murder the 30-year mortgage. Suddenly a nation of horny twentysomethings will have to suck a bigger down from their parents, or condo prices must fall.

Trust me. Or, you can pay some bewildered suburban dude 23% more for his house than he wanted.

Tell us how that turns out.

191 comments ↓

It’s not like the media, industry, government and banks aren’t conspiring to hype the market. ‘Like shooting fish in a barrel’, the old saying goes. “never give a sucker an even break”. Smoke ’em if you got ’em. Buy now or be priced out forever.

#42.99 % greaterfools will run out...then CRASH on 02.09.12 at 9:56 pm

Once the 2.99 greaterfools are gone you will see the tap (buyers) shut off for good. Not seeing any bidding wars and I live in 416 young and sheppard. In fact i have yet to see one sold sign. These bidding wars are either made up or freaks of nature. All I know is three buddies in GTA (toronto , north york and brampton) have been trying to sell for couple of months and nothing. The end is here…let the realtors spread their fake propaganda.

why dont people stop to think before they engage in bidding wars that the same house will be worth less if F makes the changes to the mortgage rules and if the rates goes up…..its so simple why dont they stop to think about this….why not come to the market 6 months later and buy a house for a cheaper price…it is so simple

Forget bidding wars as all i see are for sale signs. My girlfriend is PO’d that no one even has even looked at her house. When the RE industry is reporting every sale you know the market is in trouble. The truth will come out shortly.

Chinese money is a big factor … today as it was in the period after 1986,” said David Ley, author of the book “Millionaire Migrants”, which examines the impact immigrants had on Vancouver’s housing market.

“House prices in greater Vancouver bear no relationship to the local labor market. Prices are kept high by offshore capital arriving from immigrants and from foreign investors

Lawrence Park (North Toronto) is full of SOLD signs these days, but I’m pretty sure this is because the Realtors are leaving them out on lawns for an extended period of time.

I have noticed most houses under $1M selling in just a few days with multiple offers… but I’m highly skeptical that this environment of RE paper millionaires putting every dollar into a home would even exist if not for the lack of listings that Garth noted.

I fully expect that there will be a ton of developers caught with their cash tied up in some McMansion flip that they didn’t get to market fast enough.

91 Donalda is literally 2 feet away from my MIL’s place. We’ve looked at houses in that area before – it is in prime Agincourt (“Asiancourt” for those of you not in the know) – but never thought any of the properties were worth buying because they’re so steep. The catchment area for the school district is EXTREMELY small – very few addresses in that area are able to get their kids into Agincourt PS and Agincourt CI – their EQAO scores (for what’s it worth) are one of the highest in Toronto; a prized asset among a community obsessed with academic achievement. Also, Donalda is a 5-minute walk to the GO station that runs directly to Union, a mere 25 minute commute into the Financial District/Bay Street. A lot of the houses in that area have been torn down to be replaced by McMansions. I’m not saying the price is justified – just saying that’s what the realtors trot out when they get all glassy-eyed and slack-jawed every time they hear someone wants to list a house in that area…inventory is very low; there are maybe two or three houses listed every few months and they get snapped up in no time. We just think everyone’s lost their marbles!

” Every week comes more evidence the US economy is mending. Corporate profits are up, unemployment is down, credit demand is rising and jobless claims falling.”

You may very well be right, but you’re cockiness is worrysome. Sound too sure of yourself. Safer and, in my mind, wiser to wait a bit longer before making any pronouncements. This could still play out very badly.

The Fraser Valley does not have 257,000 people and 9000 listings, that would be crazy. Abbotsford, Chilliwack, Mission, and Hope form the “Fraser Valley Regional District” with 257,000 people. The “Fraser Valley Real Estate Board” covers Abbotsford, Mission, Langley, Surrey, Delta, and White Rock with perhaps a million people in total.

“I’m in the market for a detached house in Toronto right now. I’ve been watching bidding wars that are crazier than the bidding wars I thought were crazy back in 2007 when I bought my condo. Two houses of note in the past couple of days, detached, w/ garages, 2 bdrm bungalows in East York.

The Canadian dollar has been declared to be legal tender purely by government fiat. Certainly it is to be used as a means of exchange. I do myself. It is not a “money”; it is a currency by government decree. Were it forced to compete freely with gold coin in circulation it would quicly sink.

Large numbers of the silly public, however, persist in viewing it as some kind of store of value – which even you would no doubt agree it is not.

I speculate in the mining stocks myself, in order to profit in this fiat cash. But I have three times as much socked away in the metal as SAVINGS.

And I have yet to be disappointed with the performance of this “commodity” as an unexcelled store of value…

“Look Out Below,” “Bankers are Becoming Alarmed!” and “However, the Canadian economy is still dependent on the consumer. Fears about the global economy have slowed business investment, and all levels of government are bent on austerity. The Conservative government’s next budget is expected to put forward a plan to close the federal deficit, now 2% of GDP, by 2015—modest austerity compared to Europe’s, but still a drag on the economy.”

When you read excerpts such as this in well-posititioned and respected publications within the economic surrounds, you know it is over…

Your correspondent stylin and profiling in the brown cords, swinging out with the diaper set (this should prepare me for whats to come when the boomers start retiring en masse) …and, yes I still have it.

CEO of some company last year bussines plan was to go around, and randomly buy 25 companies. Plan backfired, didn’t do anything for share price, and if memory serve me right on q4 conference call same CEO pulled a big guns out and announced share buyback and reminded everyone how much cash they have hoarded, but that didn’t worked out as it usually does with investors.

Cat didn’t bounce…

Probably because everyone added 2+2 and clue-in that that company is lost…

Than few days later same CEO of the company that employs me yesterday reviled a plans to cut some jobs i guess in order to try boost to a share price… Jobs are mainly product research, product engineering jobs‎… nothing to say here anymore…

Now to get to the point

This morning when news broke out on a shop floor, i could see some coworkers with lots of seniority very upset. It’s not that they will get shafted when it gets to cutbacks if there is any cutbacks in our plant, it will be low guy on a totem pole like me and all those poor souls behind me… Joe the button pusher fears few things more than a cutback. He fears 1. decline in RE, and that seems imminent in Milton, Mississauga, GTA, and Brampton 2. Next budget 3. Running out of the monies if he has to retire to early…

#20 BPOE – ”Chinese money is a big factor … today as it was in the period after 1986,” said David Ley, author of the book “Millionaire Migrants”, which examines the impact immigrants had on Vancouver’s housing market.”

Nothing new there. Henry Block was preaching the same thing back in summer of 1974 but the housing prices in West Vancouver still tanked 30% 5 months later.

When the money taps turned off along with the oil taps, property crashed overnight. Mine along with the rest of them. 25% immediately from the high that summer.

People had to carry 2nd mortgages in order to sell their houses. Many ended up in foreclosure when interest rates went up. Prices of houses were rising at a rate of $1000 per month over 18 month period. At the lower end of the scale. Much higher in places like West Vancouver.

A condo that I owned and sold in North Vancouver had risen from $27000 in 1973 to over $80000 by summer of 1974. The same unit could be purchased for around $75000 in 1986. There were bidding wars back then too.

Yes, I agree that a lot of moolah is long overdue to flow from bonds into equities, but not until the money masters engineer a downturn first. So that they can get first dibs on the cheap. Look for it on or around one of the sacred annual ritual days of the great inverted Pentagram Yearly Cycle, Feb 14th. I wonder what Black Swan they’ll come up with as an excuse…

Add approximately 72 days in succession to arrive at the other 4 sacred dates…

Let’s not forget that “stock market” is a misnomer, it’s actually a “market of stocks”, or maybe a “stocks market” or “stock markets”. Some erroneous thinking can come from grouping all the stocks together and thinking of them in the singular, they are each their own animal so the right phrase is plural. Right now a handful of names including Apple, Google, McDonald’s, Exxon and the like are making for most of the profit increases.

The other thing about the indices like the S&P 500 is that they suffer terribly from “survivorship bias”. AIG used to be in there, as well as every other big bankrupt company (GM?), but they get removed from the index when they die and somebody more promising gets added in. Thus, all the zeros get removed from the average. If they left all the zeros in and just added new stocks (S&P 501, 502… 569…. N) then the averages would tell a much different story. Worse, if they stuck with the original 500 from the day the index was created, the story would be dismal.

That’s the main problem with index funds. I like them and I use them, and a financial advisor can’t necessarily protect you from AIG or Worldcom either, but they all held Enron when they went down. The next day the indexes dropped Enron, the index funds all rebalanced to track the new index composition by selling some of their assets that were still in the money to buy the new company, and life went on. But the loss was still there. Possibly much of the loss disappeared mark to market as the new company soared in value with all the new buying interest, but that was a paper gain.

Thus, a “Top x00” type of index will always overstate the performance of the broad market over longer periods of time. It’s a great marketing tool though. Although over the last 12 years, even with survivorship bias, Apple, and Google, they still can’t get them to show a profit. Maybe Facebook will do the trick. If that isn’t worth $100 billion, I don’t know what is. However, my “tech” leading indicator (my wife) just deactivated her account because it was too much of a pain in the arse, so at some point I am looking to short that sucker. She got Apple right, RIM, and recently the “neutral Apple – long Samsung” call right too. She hasn’t missed one. I just watch what she buys and what she trades in. She doesn’t even know I’m doing it!

i love this webiste, and garth is a great resource. Ive been following this blog for a couple years now. I am in recruitment and have been seeing jobs disappear in Canada’s emerging technology industries. Companies are closing, mid and senior executives losing their jobs, no financing for start-ups. I sold my mid toronto 2 bedroom home today WITHOUT AN AGENT, for $865 large, last fall i thought I could get $750k (i bought the house for $465k 6 years ago)… Who bought my house????—A great couple, both under 30. WTF? Now where the hell do I go? I rent, and see the bloodshed to come. Im out for now.

#43 Kilby – …..then Ralph Nader killed them. And rightly so. My parents were in an accident in a Corvair in 1971. Mother very badly injured. She was in hospital for months, then in a wheelchair, then limping painfully for the rest of her life. Her personality also changed as a result of the closed head injury.

401 Hiway speed limit between Hope and Vancouver was reduced from 100 mph to 55 mph to conserve gasoline. Has remained the same since. Hard to believe as I drive along the freeway today that we actually did 100 mph and more back then. Crazy.

True that corporate profits are up, but so is corporate debt. Any rise in interest rates will knock everyone hard. As for unemployment in the US, its exactly where it was when Osama…..er….Obama took office at 8.3%. The only reason its back to 8.3% is because 1.2 million people fell off unemployment benefits. The US is no better off than the day Bear Sterns went under. You’re witnessing the slow death of an empire, nothing more.

The Fraser Valley does not have 257,000 people and 9000 listings, that would be crazy. Abbotsford, Chilliwack, Mission, and Hope form the “Fraser Valley Regional District” with 257,000 people. The “Fraser Valley Real Estate Board” covers Abbotsford, Mission, Langley, Surrey, Delta, and White Rock with perhaps a million people in total.
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Surrey by itself is over 400,000 people. And for 19000 listings on the Rebgv? Garth, active listings on Monday were at 13k. Are you getting your data from poco?

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce — gold’s price as I write this — its value would be about $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

us economy is not on the mend. unemployment figs are gimmicked. corporate profits look good because the losses are being shuffled onto the public. equities and bonds are being held up by exploding central bank balance sheets. none of the problems that got us into this mess have been addressed – in fact, they’re worse than ever. when the papering over stops working, we will finally begin the descent to the real bottom. There, things will finally get fixed and mended.

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“But it won’t last. Never does. Suddenly a nation of horny twentysomethings will have to suck a bigger down looks like an erection in the bond market will be awesome enough to gain even the Amazons’ attention.” — Erection, Amazons, bonds and twentysomethings. Sounds like a wild and crazy party for Property Virgins!

“. . . some bewildered suburban dude 23% more for his house than he wanted is the path to salvation.” — Yahooo! Would that it were so, that would be an unexpected surprise. Not salvation, the money!
*QE? UK to print 50 billion more, and the US Fed is up and running. Parners in crime? One Choice can speed up retirement; Buffett Backs Fink on allocation, but Buffett doesn’t care for gold; What are they scare of? Interesting chart; Jobs are there, not enough skilled workers to fill them; VREAA Stating the obvious; 6:10 clip Garth and others may disagree, but there are always two sides to the story. The feel good numbers written about may be due to the election — Pump ‘n’ Dump, such as 2008 all over again and Train Wreck Ahead;11:31 clip Another view on America’s recovery; Deception.

No 401 between Vancouver and Hope, it’s in Ontario. Speed was 70 mph, not 100 before it was lowered. Now people regularly drive 130 and higher all the time if you use the left lane between Langley and Hope you will know this.

“401 Hiway speed limit between Hope and Vancouver was reduced from 100 mph to 55 mph to conserve gasoline.
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In the past some people may have driven from Vancouver to Hope at 100 MPH but the posted speed limit was never greater than 70 MPH.

Today on Hwy 1 in the lower mainland (except for the huge construction zone between Surrey and Vancouver) the maximum posted speed limit is 100 kilometers per hour and sometimes drops to 90 or even 80 kilometers per hour in some places.

putting the brakes on sales are expectations that rock-bottom Canadian mortgage rates will stay low, so there is no rush to buy…
real estate board boss Sukh Sidhu. “For buying power you can’t beat the combination of greater selection, the continuation of extremely low interest rates and stable prices.”
……………………
These two statements above seem to encapsulate the strategy going forward for the real estate bubble cultivators. The no rush to buy because of percieved persistant low mortgage rates suggests there are buyers loligaging about because they can buy at the low rates anytime (note the implication of buyers mulling about). The second statement “stable prices” is another phrase bandied about of late. This is a real doyuble edged knife as it can suggest no anticipated price decrease and even an opportunity needing to be exploited by buyers in the context of the above statement.
So there we have it implied stable prices resulting from buyers lacking motivation due to percieved lack of mortgage rate increases. This suggests that any anticipated mortgage increases should motivate those lazy buyers into jumping into these so called stable prices now and lock in that low rate before it goes any higher. Stable prices needing exploitation at low rates before they rise any further, because all bubble cultivators know prices only go up. Now all this nonsense will be presented in a manner cultivating just the right emotionality through non-verbal modes of communication and voila, HYPNOTISED.
Buy now before everyone can afford to…
and they landed softly ever after…

Honestly, these bidding war stories can safely be treated as mere outliers at this point. Any sort of rationalisation of their existance simply fans the fires of the hot air furnaces tended by the bubble cultivators. Any rush to buy now is total madness. America may or likely may not be turning a corner but any sort of sunlight will again be directed towards the hot air furnaces fueling the bubble rather than towards any other type of investments. Any manupulation of or buy the media in the hopes of bringing about a soft landing will simply serve to maintain these lofty prices to the benefit of the banks underwritten by the very people subject to the obscence market manipulation by the banks, government, Real Estate interests and media.

#58 Not on the boat……..9.6 Trillion$. I would never have a problem holding 10% gold of any net worth. Through history gold has been a great hedge for any circumstance. As a matter of fact, at most times the other 90% doing well may not have been good for gold, as the price was stagnant for gold, but great for other assets. Being diversified is always good. Very wise indeed.

Gold is not going up in value, an ounce of gold is the same as it was 2000 years ago, it is your ‘trusted currencies’ that are being debased, therefore requiring more currency units to purchase an ounce of gold.

(disclosure, i have being long physical gold and silver for 7 years and made substantial profits from people like you who do not understand that the greatest wealth transfer in history is currently underway.)

G-Alpha Dawg-Turner! Great post. (effeminately clapping) Bra-vo. Yet again, you have shown the light to these soon-to-be fools with your style that would make Prometheus blush. But don’t stop now, my friend! Don’t stop. You need to spread the news about the impending doom. Your wisdom? Preach! Church, Tabernacle! Push it.

One day, there will be high schools named after you and little children will sing songs about how you tried to save a country but in the end, only the Sexy People survived. I hope that day is soon. Not just for me, but for the little kids, like Sandeep in Brampton who has two other families living with them to pay a mortgage, or Chow-ping, who is a Chinese immigrant in Vancouver living in a 3000 sq/ft Condo while going to school to learn english and his Parents are back in Beijing. (I hope that song would sound a little Gordon Lightfoot-ish, but you want to today’s youth.) One day.

“Corporate insiders are now selling their companies’ stock at a rate not seen since late last July. That’s a scary parallel indeed, since that late-July spike in selling came just days before one of the more painful two-week periods in the stock market in years.”

Consider a ratio calculated by Argus Research of the number of shares insiders have sold in the open market to the number that they have bought. Last week, according to the latest issue of Argus’ service, the Vickers Weekly Insider Report, this sell-to-buy ratio stood at 5.77-to-1. And among insiders at companies listed on the New York Stock Exchange, this ratio was even more lopsided at 8.2-to-1.”

Garth, I read this PB every day, like I used to read Calvin and Hobbes, thoughtful entertainment.
This is not rocket surgery, and I get it so far, except for two of your statements today.
How is buying when everyone else is selling got anything to do with the 8% gain? Everyone selling means the market goes down, right?
How does money gushing out of bonds into equities make preferred shares cheaper? Aren’t preferred shares equities?
I’d like to understand, but my head is starting to hurt.

Preferred shares with set dividends are considered fixed income. They do not behave like common shares, have far less volatility and enjoy good liquidity. Unlike bonds you are able to collect the dividend tax credit. Unlike equities, dividends are not tied to earnings. Your other question I did not understand. — Garth

We have Extendicare (EXE.UN), which recently has rocketed to $13-$14, crashed to $6, and recovered to where it is now ($8.81 as of yesterday). They have been hit by a U.S. Government change in rules around medicare/medicaid billings (many of their nursing homes are in the U.S.), as well as a change in REIT tax treatment from Flaherty – where revenues from non-RE services get taxed higher. Good news is, despite all of this, they keep paying the juicy 10% dividened.

It is difficult for many to understand the concept of currency, debasement, price inflation, debt, taxation, and purchase power protection.

When one discovers the difference between nominal and real gains one wisens to the game.

A nourished mind does not come about by being constantly and passively spoon fed. People must seek to understand and more importantly must want to understand. Sadly, the MSM has turned most folk into sponges of misinformation and spin. Such a shame when you consider how long and hard and blatantly the population has been bent over and herded.

There is a bull market under way folks – in lies, fees, taxes, theft, fraud and debt.

The Fraser Valley does not have 257,000 people and 9000 listings, that would be crazy. Abbotsford, Chilliwack, Mission, and Hope form the “Fraser Valley Regional District” with 257,000 people. The “Fraser Valley Real Estate Board” covers Abbotsford, Mission, Langley, Surrey, Delta, and White Rock with perhaps a million people in total.

They don’t care and will hear nothing of it as it does not fit their script. This blog is not so much about truths as it is persistent hyperbole and wishful speculation built on upon a select foundation of truths. But it is those select omissions which will cause the structure of their desires to collapse around them.

Like a backyard mechanic they delve and tinker. Like armchair athletes they scoff and scorn. Like a Jack of all trades they are master of none. And like all narrow minded they are easily led astray. Through their tunnel vision they see only the hope that lies ahead as they walk by those opportunities of today.

A friend just sold his home FSBO. Sold in three days thanks to the 2.99% mortgage special to a 30 years old. During the week that the sign was up, (he took it down when all the papers where signed) about seven RE agents popped in. One came with a buyer (probably fake) and tried to get them to sign a contract where she gets 10% commission from both sides combined. My friend asked each one about the ‘elusive’ Canadian housing bubble. All said that he was lucky to get out at his price and that they’re expecting a downturn soon.

I just took a closer look at my kids’ RESP portfolio, and a myriad of “Canada Housing Trust” descriptions seem to dominate the top listings percentage-wise. The planners also seem to group these into the “Federal Bonds” which together with the Provincial Bonds category, comprise over 90% of the Fund. I’m locked in for another 2 years, hopefully, the money is safe until then… any thoughts anybody?

Under the 5-6% category comprised of Corporate Bonds, there is listed a “Real Estate Asset Liquidity Series Class A”. That sounds like a mortgage-backed security…

#48 Stupesing in Cabbagetown on 02.10.12 at 12:35 am
#43 Kilby – …..then Ralph Nader killed them. And rightly so. My parents were in an accident in a Corvair in 1971. Mother very badly injured. She was in hospital for months, then in a wheelchair, then limping painfully for the rest of her life. Her personality also changed as a result of the closed head injury.
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Sorry about your Mom but that is ignorant thinking. Something like that couldn’t happen in a Corolla….or a Pinto? How about a van?

#86… A better bet than EXE.UN in the same sector is LW (Leisureworld). Not a REIT or as big but totally Canadian and not subject to the recent and ongoing attack on healthcare in the US. Dividend is not too shabby either…

Encana is threatening to get out of NG and more into liquified. I am bearish on the oil and gas sector in general. I am decreasing my exposure this month to make more room for base metals and emerging markets.

Don’t forget that the Canadian economy is only about 3% of global economic output. And considering that our economy will most likely be nose-diving in the short-term, the smarter money at this time will be elsewhere… The pipeline saga underscores the fact that the US and the world increasingly does not need our oil and gas. The big Western dream of Harper will ultimately fail as the new Electrical Vehicle revolution takes hold in the emerging markets.

There will be new middle class drivers in the next 10 years who will never have had the misfortune of driving a conventional gas-guzzling behemoth as they quietly slink down their third-world road in their electrical vehicle, licensed by Apple or Google.

Most people don’t understand what is happening. The technology exists right now that could place the motors right at the wheels themselves and do away with the engine compartment altogether. Fantastic new designs in transport will be possible. It’s closer than you think. The era of the “car” as we have known it, is almost over.

Thanks, G-man. I began these 15+ years ago because of all the tax benefits and free money from the Feds, and never really cared about the holdings…until now….I see that their corporate bonds include those of the Big 5 Banks…aaaahhh… I am tainted and compromised by eeevvvilll….

Mr. Buyer: Any manupulation of or buy the media in the hopes of bringing about a soft landing will simply serve to maintain these lofty prices to the benefit of the banks underwritten by the very people subject to the obscence market manipulation by the banks, government, Real Estate interests and media.

this is not the writting of a Canadian living in Japan. What have you done with the real Mr Buyer?

This is what I posted yesterday, folks: In the western burbs of the GTA as well, no signs of a slowdown. I know, cuz I’m looking for SFHs for 2yrs.

I hope a correction is around the corner, but we can’t assume it’s here just bcuz Garth or anyone else says “It has started – Hope you’ve liquidated” etc. RE is local, and where I am, there is simply not enough inventory to warrant that sort of statement. In the Spring, maybe – if Agincourt fever doesn’t travel this side of the GTA!

At least the EU is trying to do something to protect the privacy of it’s citizens. What the heck is our government doing?

and another OT – Not sure if this petition will have any effect on the proposed legislation, but if we don’t voice our concerns we have no one to blame but ourselves. Speak up and forward it to all your friends, etc.

No Internet Lockdown

“Massive media conglomerates are lobbying the government to create shadowy legislation: an Internet lock-down, where Internet users are cut off for no good reason, where vast swaths of the Internet are removed or hidden from view, and where users are locked out of their own services.

A similar scheme in the US led to a huge public outcry forcing Big Media lobbyists to back off from their plan to impose the now-infamous SOPA and PIPA1 legislation.

Now, those lobbyists are turning to Canada through legislation like Bill C-11 and trade agreements called ACTA2 and TPP3. Internet law expert Michael Geist recently revealed that behind-the-scenes, Big Media is pushing for powers that include website blocking4, Internet termination for people that threaten their business interests5, and huge threats for sites that host user-generated content (like YouTube)6 in addition to the digital locks7 already in the Bill.”

Realtors often concoct quite fantastic scenarios . According to DA, there are hordes of buyers circling Kelowna ( unable to enter for some peculiar reason), tormented by the huge pool of properties held by ‘unmotivated sellers. While this curious phenomenon explains the dreadfully slow pace of sales, it surely must be frustrating for realtors

“When the dust settled, a property worth $598,800 before lunch, had a valuation in the afternoon of $740,888.”
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This spring I suspect we will see a lot of winning offers with number eights inherent.

401 Hiway speed limit between Hope and Vancouver was reduced from 100 mph to 55 mph to conserve gasoline. Has remained the same since. Hard to believe as I drive along the freeway today that we actually did 100 mph and more back then. Crazy.
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#68 Kilby on 02.10.12 at 2:15 am
#51 Ronaldo.

No 401 between Vancouver and Hope…

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Both of you are mistaken….

In 1964, , a new expressway (or “freeway”), originally designated as Highway 401, opened up on Highway 1’s current alignment between West Vancouver and Hope. The expressway became part of Highway 1 in 1973.

Also, I do NOT believe we ever had a 100mph speed limit. “Flying Phil” (Minister of Highways at the time) got the limit up to 70mph but that was about it….

My best time was Abbotsford to Grandview exit in 18 minutes…..but yes, I was speeding…. ;o)

I put my Toronto condo up for sale last week. So far, I got 4 offers. 3 were from real estate agents (93-96% of asking), and 1 was from a homebuyer who had 5% to put down (according to his agent) so we didn’t bother with his offer as he probably wouldn’t get financing, even though it was at 99% of asking.

I’m curious as to why real estate agents are bidding on my property? I’ve never had this happen before, and I’ve sold 5 condos in the last 6 years.

#21 ShiveringDuck.
So FORSALE signs indicate a slowing market, and now, SOLD signs indicate the same, cuz they prove agents have time on their hands?? Oh, pleeeease, you gotta come up with better logic for a slowdown :)
SOLD signs take exactly 10 seconds to stick on. They’re the best form of publicity – They give genuine ‘street cred’, without having to buy ad space, think about it.

The true Fraser Valley stats are in the link you provided.
So you are correct about the population. However, the FVREB can be confusing by its name. The board covers N Delta, Surrey, Langley, Aldergrove, Abbotsford. So the FVREB, covers approximately an area if 700k people.

And for Larry’s active listings stats, he showing stats for all 3 lower mainland boards. And that was updated in January. The number for the REBGV was at a hair over 14,000 and climbing.

i really think stock markets are due for an ease of 5% correction while some people will harvest the gains. stabilize a bit then go another 3-5% down. that will be the perfect time of entry for an astonishing 10-15% gain in the Q2

# 8 Smell the Coffee.
Not sure where you spend your time in AZ.Just returned from weeks in Scottsdale and area.Top end resturants are full, shopping centers are busy, streets and highways are jammed with people on the go.Never seen so many new high end vehicles on the street. Oh and by the way, the Barrett Jackson auction set a new record this year for sales,breaking the 2007 record.
Someone is spending money on things other than shelter now that the great real estate housing conspiracy has crashed. Enjoy those sunny 70 F days,
take a dip in the pool and imagine what hell it must be paying 850 K for a 60’s bungalow in GTA and then having to spend your days living in it!

Canadians rarely seem to consider the fact that their biggest investment might (read: will probably) go down in value. Falling house prices is an idea that many Canadians laugh at. Americans laughed too before America’s bubble burst. Now, many Americans are locked into paying mortgages on houses that are becoming worth less and less each year.Does this sound like the basis for a healthy economy? Indentured servitude for three decades just to see every dollar, dime and penny earned go toward paying for a depreciating asset! If you buy a house today, or if you bought a house over the past five to ten years, that is what you are risking.If Canadians do default on their mortgages, banks can not only take the house, but have full recourse to go after all their other assets and income.Yet Canadians seem more than willing to take the risk. Why? The same reason Americans did. When house prices are going up, it makes everyone rich! A 5 percent yearly gain on $300,000 is a cool $15,000—money that can be tapped through equity lines of credit.

I’ve mentioned Teck Resources before. For me they are a weather pane. See here they made the top ten list for recent insider trading… along with pipelines and energy…another factor supporting a possible downturn…? Look at one of the major mind control purveyors, Astral Media… shares are up while insiders sell like mad? Nothing to see here…

The Fraser Valley does not have 257,000 people and 9000 listings, that would be crazy. Abbotsford, Chilliwack, Mission, and Hope form the “Fraser Valley Regional District” with 257,000 people. The “Fraser Valley Real Estate Board” covers Abbotsford, Mission, Langley, Surrey, Delta, and White Rock with perhaps a million people in total.

I don’t need to look up the stats to know that it is highly improbable that the defined boundaries of geopolitical area encompassing a population of 257,000 would be the same area another so specifically defined by a completely separate organization that encompasses an area of households of which 9,000 are listed for sale. But maybe I am wrong… Maybe those two entities each with its own mandate collaborated and defined their boundaries together to be the same. Hang on a minute; the Fraser Valley Real Estate Board covers several municipalities. Wow! What co-operation! Ya think?

And Yatter Matters… seriously? Come on now Garth are you on board with REALTORS® or not? Don’t you think you should use a more “reliable” source than a REALTOR® for your statistics when you so often condemn them so in front of your Dawgs.

Just got a letter from Flaherty’s office saying how home ownership is one of the most important “investments” a Canadian can make and that they are going to ensure that we all will continue to be able to own homes. This will be possible because of the “prudent” loan practices of our banks.

“The Fraser Valley Real Estate Board is an association of more than 2,900 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.”http://www.fvreb.bc.ca

Do a count and I am sure you will find there is contained within those municipalities quite a few more people than the 257,000 you quoted. But again maybe I am wrong and there is indeed a mass exodus out of B.C..

You said, “This blog is not so much about truths as it is persistent hyperbole and wishful speculation built on upon a select foundation of truths. But it is those select omissions which will cause the structure of their desires to collapse around them.”

Wow. Talk about the pot calling the kettle black. How would you diagnose our delusional friend BPOE Dr. DA?

The facts have been clear for several years now. The world went into a credit crisis in 2008 and we are in a long, protracted period of asset price deleveraging. It is global and there is now escaping it.

We can argue about the details and how it plays out all we want. Markets may move in different directions for a time. People will make money on speculation and fortunate timing. However the trends are clear and irrefutable.

No one in their right mind wants to believe this. Anyone who understands the profound implications for our society and our economy should know just how difficult the road ahead is going to be. However those that live in denial don’t do any of us a favour. In particular, the crowd who is clearly directly benefiting from continuing to push the delusion such as BPOE, Alan, Stevenson, TRT and the rest of the “buy now” realtor crowd.

I believe in climate change and that it is significantly contributed by man. I believe it because the facts are too overwhelming and the vast majority of objective scientists who study it (roughly 97%) agree. I wish it was not true. It does not benefit me in the slightest to believe it to be true. However, clearly, it is. Denial does not help me or others to deal with it.

I may be wrong but seems to me the combined population of those municipalities where the Fraser Valley Real Estate Board does business (North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission) totals something more like 700,000 not the 257,000 you correctly quoted as being the population of that area over which the Fraser Valley Regional District presides.

I just took a closer look at my kids’ RESP portfolio, and a myriad of “Canada Housing Trust” descriptions seem to dominate the top listings percentage-wise. The planners also seem to group these into the “Federal Bonds” which together with the Provincial Bonds category, comprise over 90% of the Fund. I’m locked in for another 2 years, hopefully, the money is safe until then… any thoughts anybody?
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Take a look at the maturities of individual securities, in most cases the bonds are held until maturity and do not experience aggressive price volatility. I am quite familiar with the plan you are describing and I second Garth’s opinion about locking into a 18 year investment horizon with nothing but fixed income. Another fault of the plans are the severe penalties associated with early terminations. Of course a better concept is to set up a pre-authorized monthly payment plan with your financial institution, primarily invested in equity ETFs (at least during the first 10-12 years of the plan) after which you can shift your investments and contributions into safer assets to preserve capital.

The only plus of the plans is their proclaimed simplicity, most people are sold on 20% government grants and the max $2,000 Canada Learning Bond. Not a bad concept, fees are not outrageous, and it motivates you to save.

>#80 OneMoreThing on 02.10.12 at 6:03 am
>US on the mend…just appears that way!

Small business people are my bread and butter and things are hopping. And I’m in the rust belt. The real rust belt, forget autos, this one got put out of business by the railroads… My clients are all shifting into business growth mode right now.

It’s just possible that they are fearing a big dem win in November and real taxes on cap gains in 2013. Or, they are hedging against the possibility, just for the heck of it. If cap gains taxes are brought in line with taxes on actual productive work, then they are looking at losing 15-20%. Hard to imagine gains that high over the next year from any other price movement.

#88 Preciousss on 02.10.12 at 8:31 am It is difficult for many to understand the concept of currency, debasement, price inflation, debt, taxation, and purchase power protection.

When one discovers the difference between nominal and real gains one wisens to the game.

A nourished mind does not come about by being constantly and passively spoon fed. People must seek to understand and more importantly must want to understand. Sadly, the MSM has turned most folk into sponges of misinformation and spin. Such a shame when you consider how long and hard and blatantly the population has been bent over and herded.

There is a bull market under way folks – in lies, fees, taxes, theft, fraud and debt.
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Well said. Protect yourself – gold/silver will be the only asset to run too.

Long time reader, first time I thought I’d chime in…. they’ve got a new subdivision in North Etobicoke…. 17 buildings, $750 K a pop, two for $800 K and two for $1 M…. not a single sale… been on MLS since October…

Good times letter from Okanagan realtors…Looks like happy times are back!

Good news
For the first time in 3 years we are hearing some good news!

Prison to be located in Oliver
The announcement of the prison to be located in Oliver will have a positive impact on the South Okanagan, it means jobs coming into the area after the last few years of layoffs and places closing .

American Housing Crisis to End in 2012 as Banks Loosen Credit Standards
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit. dsnews.com –

Mortgage rates tumble to record low
The average rate on the 30-year fixed mortgage dropped to the lowest since records have been kept. msnbc.msn.com –

Increased sales in January
We had good sales in January considering the slump last Fall

To me these are good indicators that we hit the bottom of this down turn and we are turning around and on the way up. The prospect of jobs, the American crisis coming to an end, the interest rates the lowest I can remember and an increase in sales in January.
I know the upswing in the Real Estate market will not happen quickly but at least we are looking up instead of wondering if it will ever end.

Go back and check your link again. While you jump all over some supposed difference between jurisdictional boundaries, you conveniently ignore the startling news release itself. Sales and prices are dropping in the Fraser Valley, while listings are climbing. Perhaps you should send some of the vast multitude of buyers trying to ‘get into Kelowna’, in that direction. You would be helping your fellow realtors in the lower mainland, and taking some of the heat off the Kelowna market at the same time………I am tired of fighting my way through this mob of buyers every time I leave Kelowna city limits……

Probably the only post in this blog that has the ability to understand what is really happening beyond the microscopic outlook everyone has on this blog.

First and foremost, it is necessary to put history and timelines in the right context. The Chinese have ruled the earth with the exception of the last 200 years. There intentions have always been to get back on top and it appears they are well on their way. Like the tortoise and the hare, the tortoise will win the day.

The Chinese (and other cultures) fully understand that he who owns the land, rules the people. No different than the families of yesteryear that owned parcels of land large enough to be considered small counties in Roman times, the people could only work someone elses land. Real home/land ownership is a modern day pre-occupation. We overlook this simply because we depend on modern day system for the procurement and supply of goods. If and when this changes, you will fully understand the value in land ownership.

At a more complex level, the movement of capital from Chinese, Taiwanese and Asian investors to purchase property in Canada is an extention of what has already been happening in Asia for the milenia. Most importantly, the fact that the youth and students that are tied to these families are far better educated, dedicated and fully understand their role in advancing the family in the new world. They will displace your children in the highest paying jobs. Our lacksadasial culture cannot compete. The average Canadian still does not see this underway and most under 20 will have no idea what has hit them. It has already started.

This phenomenon is not unique to Canada. It is happening all over the world but clearly Canada is one of the top destinations for new wealth.

How does this relate to property valuations and fluctuations? The period of time we seem to be so focused on this blog is a miniscule period of time when it comes to the longer term thinking of these immigrant families. Their timeline is so much greater than ours. It is intergenerational and while we should be congnisant of short term real estate fluctuations, I am not sure how over-reacting by calling bubbles and bursts is going to help us in the long term, given that you are competing with sticky, long term money and planning.

Have a closer look at the insiders selling.
They’re all boomers ready to retire and some of them are overdue.
Now tell me, who’s buying? Some insiders perhaps?
I really don’t think it means as much as you think it does.

#131 Adviser… Thanks. Yes, there are various maturity dates, I saw one for 2037, but don’t they re-balance annually or so? It’s only 8 years of contributions minimum at which point my kids can claim the money plus interest and benefits upon entrance into university. It’s very similar to a universal life policy I’m also stuck in for another couple of years….I’ve got 4 of these RESP’s, the last one with two years remaining. You’re right, it forces you to save, but at least the little rascals will have something… hopefully they won’t need or want student loans (crossing fingers).

Let me tell you WHY Canadian house prices will continue to rise while American house prices will continue to fall: Its because America has now turned into a POLICE STATE where you will be BEATEN, ARRESTED, and even possibly put TO DEATH for the simple act or recording a police officer or any other law enforcement officer, even if the only thing you filmed was him/her standing in just one spot.

There are hundreds more links but these generally give you the idea that in America if you take out your cell phone or digital camera, you most likely will be getting arrested and spending the next few years in prison as a result. Its crazy, totally crazy, and foreigners would rather come here to Canada and buy a house here where they are safe to do as they want with their digital cameras, as opposed to risk going to prison for the rest of their life for the same thing in America

Great post. Thanks for pointing out that the housing industry has UBC in its pocket. Only problem is that the Vancouver Sun articles don’t mention that.

Garth, how about a piece on corruption in academia as it relates to industry sponsorship and the associated bias? People read opinions by someone like TS at UBC and assume that the academic qualifications / affiliations equate with reliability, integrity and transparency when in fact the opposite is often true.

Go back and check your link again. While you jump all over some supposed difference between jurisdictional boundaries, you conveniently ignore the startling news release itself. Sales and prices are dropping in the Fraser Valley, while listings are climbing. Perhaps you should send some of the vast multitude of buyers trying to ‘get into Kelowna’, in that direction. You would be helping your fellow realtors in the lower mainland, and taking some of the heat off the Kelowna market at the same time………I am tired of fighting my way through this mob of buyers every time I leave Kelowna city limits……

You casually dismiss a miscalculation between a group of 257,000 people and that of more than 700,000 “some supposed difference between jurisdictional boundaries”?!? And you wonder why your homes aren’t selling so well?

Imagine the scathing ridicule I would be forced to endure had I made such a miscalculation. But I get it.

Form Man you made your own bed now lay in it yourself and quit trying to drag me into it. Your just not my type. };-)

The Corvair was inherently unsafe because GM management didn’t want to install an anti-sway bar that would cost them $8 per car. Nader only became interested after many lawsuits were filed against GM because of Corvair crashes.

“with shorts about to get slaughtered as the S&P 500 passes a milepost. ”

That’s a stupid comment. “Mileposts” (a rather unfinancial term) have nothing to do with gains and losses, which are continuous based on in and out price. Your cover price/basis spread could care less where the S&P is.

What you have demonstrated so sadly, if the difference between the US and Canada. There is more transparency with current events in the US vs. Canada. Shouldn’t you be more concerned about what damage the PM has done to the future of Canada in the last couple of days in China?

Absolute mania ! North of Jefferson side Rd. off Yonge st. between northern Richmond Hill and King City ( King city side road). Parking lot of a new home site completely jammed, lineup of cars up the shoulder side of Yonge St for a km all day as cops try to manage traffic congestion !

You would think they were giving the houses away for free.

Not to much out of your way Garth on the way home to the bunker, check it out.

Foregoing the concept of a one world currency, it would be curious to see what happens if the Chinese, after calling their IOUs in from the US, then ditch the Yuan, the Euro fades into black and the US$ is laid to rest. These are far out times.

Does Timmy’s take Russian Roubles for a large D-D? The battle lines are being drawn up, with the Eurozone vs. Russia and China vs. the US. The NWO will come from the respective winners.

#103 disciple — “. . . attract some horrific astral entities.” — That is where the male demon in The Exorcist is, and still roams freely around here.

#153 Waterloo Resident — Don’t be too sure. Obomba and Harper may be of different political stripes, but they walk in lock-step with the other, obeying their masters implicitly.
*
Charles Manson quotes: — “I can’t judge any of you. I have no malice against you and no ribbons for you. But I think that it is high time that you all start looking at yourselves, and judging the lie that you live in.” and “I ain’t got no magical powers and mystical trips and all that kind of crap. It’s kind of silly.”
*
Little Johnny and Suzie Creamcheese jokes have been posted before, but it would be better to meet one or both in person. So, here.

#124 KILBY: “This will be possible because of the “prudent” loan practices of our banks.”

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I knew Flaherty would play up that word — ‘prudent’ — for all it’s worth. We’ll hear the word alot in the months to come, as he hopes we’ll forget all the governments’ idiotic decisions in the recent past….

#125 DEVILS ADVOCATE: “Do a count and I am sure you will find there is contained within those municipalities quite a few more people than the 257,000 you quoted. But again maybe I am wrong and there is indeed a mass exodus out of B.C..”

Have a closer look at the insiders selling.
They’re all boomers ready to retire and some of them are overdue.
Now tell me, who’s buying? Some insiders perhaps?
I really don’t think it means as much as you think it does.

It means nothing. — Garth

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It’s not Grandpa boomer sitting on the couch eating ding dongs that are selling in that article. These are corporate executives of fortune 500 companies CEO’s, CFO’s COO’s etc. That is what “Corporate insiders are now selling THEIR companies’ stock” means. You need to have a closer look at what was written.

As far who’s buying, NYSE volume is down 20% so far this year and redemptions or money pulled out of the market by retail investors has occurred for something like 27 weeks in a row. So to answer your question. The High Frequency traders are buying and liquidity provided by the Fed is also providing liquidity to the market and allowing those “insiders” to get out…

By the way, anything that doesn’t support Garth’s thesis means nothing.

#23 DD
“No, gold is not money. It used to be money, but it isn’t any more. The modern global economy would not be possible without trusted currencies.”

What have you been smoking? (can I have some)

Are you aware of the dire state of the modern global economy? Have you seen what is happening in Greece, probably Portugal next, then Spain. And then the realisation dawns that banks in other countries, Germany, France, UK are holding these other countries debt that is not gonna be repaid, what happens next, yes it is the tax payers that are gonna suffer, not just now, not just in ten years, but maybe 20, 30, years down the line.

Trusted currencies? You mean the fiat currencies, when central banks can start the printing presses and hey presto an extra ??????billion dollars/sterling etc pumped into the economy. Tell me exactly how that can be done with Gold/Silver?

What’s really telling is that both DA and BPOE are posting multiple times to a single thread. Why aren’t they out selling or telling clients not to list? Actions speak louder than words. This is a done deal the tickets have been bought and the blog is waitig for the main event. There is no knight in shinning armour, people will experience the pain as that is the only option left. When the unexperienced, educated youth are buying houses prices 8 times that of their parents we have a problem. My friend couldn’t even explain how mortgage rates worked, all he knew is that they were at an all time low. He doesn’t brother to due his due diligence, rates will always remain low cause that’s all that he knows. Ignorance is not bliss, it is disastrous in most if not all cases. I think I will also have to name my pet monkey after DA and BPOE. When the housing melt gains more momentum watch the angry finger pointing to start. That’s why the Reform/alliance/nutty/somewhat conservative federal party will sink to all time lows in the polls. No wonder they don’t want to be caught in the middle of this. Wishing will not make this go away, momentum is about to take hold and for every action (huge upswing) there is a equal and opposite reaction (devastating down turn). When you get sick you don’t get better instantaneously……things take time and no amount of positive thinking can stop this from bubbling over. Another tell tale sign is not to consider the facts and just argue empty rhetoric.

On the subject of volume. This down move today much like all the up moves have been on anemic volume. Even with the VIX spiking up today. So there hasn’t been much strength in either direction with respect to volume. Just a slow melt up on weak volume with rallies the last 15-50 minutes of the trading day. Bonds and equities cannot continue to be strong simultaneously. Either we are in a true recovery and investors get out of bonds and into stocks which cause yields to spike and expose the U.S.’ 100% debt to GDP or the bond price continues to strengthen and the equities begin to break down. Of course, this is all a mute point with all the Central Banks intervention that has neutered the free market mechanisms. The Fed/U.S. government must have historically low interest rates and a strong stock market at the same time, hence the central bank involvement to make it so. That never ends well though because the real economy doesn’t the support the amount of liquidity/debt being pumped into it…

US deficit projected to rise from 3 trillion to 11 trillion by 2020. Very good news for gold me thinks :) I can do 8 years standing on my head for a guaranteed payday. The trouble is that it is so obvious and slow that it bores the average investor into a coma. Most want ‘Wall St’ in their portfolio returns….. siss boom bah……doesn’t work that way…sorry.

An 11 year appreciation in the value of hard assets is blatant reality smacking you in the face. Gold in particular has risen every one of the eleven years in this extraordinary cycle that began when ‘The Great Bozo’ Greenspan decided to paper over the internet bubbles burst.

Why you say? Its called runaway inflation…….not what you hear in the pronouncements of the BOC silly speak of CPI at sub 2%……bwahahahahahahahaha ..you have to be an idiot to believe that while at the same time watching everything treble and quadruple in ‘price’ ( note I didn’t say value) over the same period of time.

The macro on this issue is slow moving cantankerous and timing is out the window…….it’s just rolling along like a glacier….crushing the pronouncements of the BOC underheel as it passes.

Think your real estate is appreciating….you’re a fool……no gold or hard asset exposure…..a greater fool. The writings on the wall……stay sober for a few days in a row……try to focus.

In the GTA, where millions of people live, where the province has introduced strict “Greenbelt” laws to limit urban sprawl and where traffic is too ridiculous to even consider long commutes, single family houses in good locations are always going to be expensive. Although I think that prices are inflated, there is no guarantee that they will go down because of limited supply and high demand. The example of 91 Donalda Cr in Agincourt is a reasonably good neighbourhood, close to a GO train line (unfortuntately only 5 trains a day at the moment) and the much debated Sheppard subway/light rail which pushes up prices. We are getting to be like California where houses cost an arm and a leg despite the housing crash.

Most families in the GTA are going to end up living in condos though, like any huge city. The price of condos WILL go down because there is an endless supply of the things. The condo market (particularly downtown condos like Yorkville) is clearly a bubble.

#183comfortably numb on 02.10.12 at 11:15 pm
“What’s really telling is that both DA and BPOE are posting multiple times to a single thread” – #173 Don on 02.10.12 at 8:51 pm

DA “You, like so many, haven’t a clue what the business of real estate is all about or how it is done.”

Right, I forgot. You need to take that incredibly hard 6 week course to really know what’s going on.

Ya what a coup eh? And in return all we have to do is slam a sign into the front lawn and sit back waiting for the offers to roll int. Once one does we put a “SOLD” sticker on that puppy and then collect a cheque for… what $25,000,maybe more? No wonder the average agent sells but 4 homes a year. Why work harder and pay more tax or miss those golf games or ski days or being at the pub with your unemployed friends? That’s a 100 large for doing what?!? Nothing serious. Nothing like – working on your car, or your teeth, or your brain, or working in the oil fields or… even one of those menial government jobs so deserving of the pay and pension. It’s like winning the lottery! You should get on board numb-nuts. What’s stopping you from taking that 6 week course and then raking in all that dough? Come on down!

But the truth is actually I don’t at all disagree with your obvious sarcasm which tells clearly of your lack of respect for my profession. You clearly lack a complete understanding of the business but the premise of your sentiment is noted, acknowledged and I agree… REALTORS® should be required to have a higher level of training than they currently are.

The prerequisite qualifications to entry into the business of real estate are far too lax in my opinion. I believe that for one to become a REALTOR® they should be required to have a relevant university degree then subsequently be enrolled in and successfully complete a mentorship period of one to two years before being licenced to practice on their own. I believe, as well, that there should be a lot more rigorous professional development prerequisite to maintaining an active license including but not limited to courses on understanding building construction, economic geography, the legalities of the industry, negotiating and so on. Currently there are such prerequisites but not nearly demanding enough in my opinion. Three one day courses over the course of a two year license cycle is simply not enough.

So you all would be doing me, and yourselves, a great favour if you would voice your disapproval of the lack of qualification you perceive our membership receives before managing the most expensive investment most make in a lifetime – your home. And when and if you ever do employ a REALTOR® check their qualifications to ensure you are in fact hiring someone who has qualification of more than just a “6 week correspondence course”. Unless, of course, you are quite happy trusting your home to the hands of such a practitioner.

Sure, anyone can take the course but not everyone passes, and yes those who are good at studying and reading questions designed to mess with your mind can also qualify to trade in real estate. But those who succeed in real estate know what it takes and it is often not easy street. Like any business, it’s harder to stay at the top than getting there. I agree mentorships work, but you need to get both feet wet and learn the hard way. I for one landed a great mentor who does not hold my hand in any way but is always there when I need them most and guides me in a way to succeed and be the best.

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.